change in accounting principle tim mattke company began operations in 2012 and for 1562525

(Change in Accounting Principle) Tim Mattke Company began operations in 2012 and for simplicity reasons, adopted weighted-average pricing for inventory. In 2014, in accordance with other companies in its industry, Mattke changed its inventory pricing to FIFO. The pretax income data is reported below.

Instructions

(a) What is Mattke’s net income in 2014? Assume a 35% tax rate in all years.

(b) Compute the cumulative effect of the change in accounting principle from weighted-average to FIFO inventory pricing.

(c) Show comparative income statements for Tim Mattke Company, beginning with income before income tax, as presented on the 2014 income statement.